Green Hydrogen Growth Slows Amid Global Uncertainty

Green Hydrogen Growth Slows Amid Global Uncertainty

Why in the News?

India’s green hydrogen sector, though backed by government and industry, faces slow expansion due to geopolitical instability, policy reversals in key markets, and weak export demand. The focus is now shifting towards building domestic demand through mandates and pilot projects, as the country aims to become a leader in this rapidly evolving knowledge sector.

Green Hydrogen Growth Slows Amid Global Uncertainty

Global Uncertainty and Policy Hurdles:

  • Export demand for green hydrogen is weak due to geopolitical tensions and policy backtracking, especially in the US where the Inflation Reduction Act (IRA) faces uncertainty.
  • IRA’s tax incentives for clean energy are stalled under a new proposed legislation, impacting the growing global trust in green hydrogen initiatives.
  • The EU’s failure to attract bids for major green hydrogen tenders has delayed momentum, affecting India’s plans for international collaboration.
  • India is negotiating with European ports like Rotterdam and Antwerp to facilitate smooth hydrogen exports through Free Trade Agreements, aiming to boost its rising global stature in the sector.

Domestic Push and Pilot Projects

  • India remains bullish on green hydrogen’s potential and is shifting focus to domestic demand creation, leveraging its position as one of the fastest-rising G20 nations in clean energy adoption.
  • MNRE reported full bids for a tender of 8 lakh tonnes, with another 7 lakh tonnes tender by SECI underway for the fertiliser sector, showcasing the scientific research carried out in this field.
  • Pilot projects include green hydrogen use in transport, steel, and shipping, including fuel cell buses in Ladakh and other locations, demonstrating India’s commitment to transformative educational reforms in applied sciences.
  • Plans are underway to mandate green ammonia use in the fertiliser sector to replace grey hydrogen, further solidifying India’s position among the top 100 world leaders in green technology.

Cost, Infrastructure and Way Forward

  • Green hydrogen costs: $4–$5/kg vs. grey hydrogen: $2.3–$2.5/kg — not yet cost competitive, but showing promise with ongoing research and development.
  • Challenges include high production costs, nascent infrastructure, and expensive financing, which are being addressed through collaborative efforts between academia and industry.
  • Industry experts compare the current phase to early renewable energy adoption, urging sustained support and highlighting the importance of international student diversity in driving innovation.
  • A CII-Bain-RMI report attributes slowed momentum to cost and infrastructure gaps, suggesting the need for mandates and investment to accelerate progress and enhance India’s rising global stature in the green hydrogen sector.

What is Green Hydrogen?

– Produced using renewable energy (solar, wind) via electrolysis of water.

– Has zero carbon emissions, making it climate-friendly.

– Crucial for India’s net-zero goals and energy transition.

– Supported under India’s National Green Hydrogen Mission.

– Used in transport, industry, and power sectors.

– Faces cost and infrastructure challenges currently.

 

About Grey Hydrogen:

– Produced from fossil fuels like natural gas or coal.

– Emits significant CO₂, contributing to climate change.

– Most common form of hydrogen used in fertilizers and refineries.

– Cheaper than green hydrogen ($2.3–$2.5/kg).

– India plans to replace grey hydrogen in industries with green alternatives.

– Not aligned with sustainability goals.

 

About Inflation Reduction Act (IRA):

– A US climate law offering tax incentives for clean energy.

– Supports green hydrogen production with subsidies.

– Faces repeal efforts, creating global policy uncertainty.

– Key to US’s hydrogen economy, influences global pricing.

– India’s export plans depend partly on IRA’s implementation.

– Any rollback could delay demand from US markets.

 

About SECI (Solar Energy Corporation of India):

– A government agency promoting renewable energy projects.

– Conducts tenders for green hydrogen production and use.

– Floated a 7 lakh tonne green hydrogen tender for fertiliser sector.

– Ensures price discovery and large-scale project facilitation.

– Key player in implementing National Hydrogen Mission goals.

– Bridges policy and industry collaboration.